Chapter 13 Bankruptcy

Chapter 13 - Manageable Payments to Creditors.

Chapter 13 bankruptcy is different from Chapter 7 in that instead of your debts being simply wiped away, you repay a manageable portion of those debts(often as low as 10%) through a payment plan lasting 3-5 years. The length of your payment plan and the amount you repay is based upon your disposable income. Your disposable income is based on the amount of money you have left over at all monthly expenses. Typically Lenders cannot foreclose or repossess if your plan is paying them back in full assuming you stay current from that point on

Another great tool that Chapter 13 bankruptcy allows in certain cases is the removal of judgment liens and even second mortgages if your house is completely under water. As your bankruptcy attorney I will do everything I can to make sure your payment is as low as possible.

To quality for Chapter 13, you need to show you are able to meet your plan payments. Often times, those filing Chapter 13, did not qualify for a Chapter 7, because of their income being higher than the maximum income allowed by a Chapter 7 filing or some other reason like they filed bankruptcy within the last 8 years. However, the vast majority of those seeking bankruptcy protection are able to file chapter 7. In 2019 there were only about 4,000 Bankruptcy(about 25% of Chapter 7 filings). Now there are limits as to how much debt you can have to file for Chapter 13. However, the limits are fairly generous and I would be happy to review your situation so that we can determine where you stand.

What is the Process for a Chapter 13 Bankruptcy?

  1. Take the Required Credit Counseling Course (before you file) - You can do this online in the comfort of your own home. Your attorney can help you find an appropriate course.
  2. Collect the Documents Required by Your Attorney (before you file) - I provide my client's with a simple checklist for this.
  3. File the Case - Relief... this is when the "automatic stay" kicks-in which stops garnishments and stops creditors from harassing you.
  4. Paycheck Withholding - The trustee will issue a "withholding order" to your employer to withhold the payment plan payments from your paycheck.
  5. Meeting of Creditors (about 45 days after you file) - The name is a little scary, but almost 100% of the time creditors don't show up to this meeting. What will happen is that you will meet with a trustee who will examine you under oath about your finances.
  6. Take the Required Financial Management Course (within 60 days of the Meeting of Creditors) - In Akron, you can do this online or via the telephone in the comfort of your own home in Akron. Your attorney can help you find an appropriate course.
  7. Plan Confirmation (About 60-90 days after the Meeting of Creditors) - As long as the proposed plan is fair, and addresses any objections you should receive your plan confirmation. At this point, your plan will be set, and as long as you make all your payments on time(which payroll deduction helps assure) you will just sail along until you have made all the payments. Once all the payments are made, the plan will be terminated and all the debts included in the plan will be discharged.